Brown Bag Seminar: Information Design with Optimal Frame Choice

Abstract: What is the relationship between framing and communication? We study an information design model where agents frame the world differently: Sender (he) conceives all payoff-relevant states of the world, whereas Receiver (she) cannot disentangle some of them. Persuasion occurs in two stages. First, Sender chooses Receiver’s optimal frame, deciding whether to refine her conception of the world. Then, within the chosen frame, Sender designs an optimal information structure. We characterize Sender’s trade-off between keeping Receiver in the dark and refining her conception of the state space. Receiver's preferences and beliefs change in response to refinement. We assume that Receiver has sub-additive beliefs: she assigns a lower probability to a union of events while conceiving them together rather than separately. Sender benefits from re-framing if it makes persuasion easier or unnecessary. Whether refinement is optimal depends on what contingencies Receiver cannot disentangle and how Receiver perceives the world in her initial coarse frame. We show that Sender and Receiver interests are often aligned, and mandating re-framing backfires.